How to stop Uber’s rotten culture from spreading

Imitation may be the sincerest form of flattery, but it is the most dangerous form of leadership development.

Take Mr Travis Kalanick. The values of Uber’s founder became the company’s values.

Here are a few: “Toe-stepping”, the idea that the best should rise to the top, even if they have to hurt rivals on the way; a willingness to have a “principled confrontation” with opponents, be they established taxi firms or local authorities; and the self-explanatory “always be hustlin’”.

A report into the transportation company’s recent controversies (prepared by former United States attorney-general Eric Holder and commissioned by Uber) points out that some of those values have “been used to justify poor behaviour”.

That is quite an understatement for a company accused of ignoring sexual harassment complaints, putting driver safety at risk and misleading regulators.

But whether Uber is too polluted to clean itself up is important, not just for the future of the company but also for the wider corporate culture.

There must be thousands of Kalanick clones out there who saw the way the Uber founder’s aggressive approach achieved a US$68 billion (S$94 billion) valuation in barely eight years and mimicked it at their own companies.

The parallel with the late Steve Jobs is instructive. His bad behaviour was often excused by the fact that he built and led a world-changing company.

But many fans inferred wrongly that the Apple founder’s perfectionist rants and arrogant treatment of underlings were the key to wider success.

As Mr Bill Gates told one of his biographers: “So many of the people who want to be like Steve have the a**hole side down. What they’re missing is the genius part.”

Mr Adam Lashinsky, author of Wild Ride, a new book about Uber’s rise, says Mr Kalanick rejects the notion that “founder CEOs have to be a**holes to be successful”, but is “just short of obsessed” by the question.

Whether or not Mr Kalanick is an a**hole (he tells Mr Lashinsky: “I’m pretty sure I’m not”), the slavish imitation of business success leads to unpleasant unintended consequences.

Often, business schools and consultants dress up the distribution of lessons from successful enterprises as part of a noble quest for best practice.

But such lessons encourage me-too business models (the lazy “we are the Uber for ... ” approach, for example) and can accelerate the dispersal of unsavoury management techniques — from forced ranking of employees, another bad Uber habit, to the reckless pursuit of increased shareholder value.

Poison at one successful, but rotten, company inevitably infects those closest to it.

The classic example from the early 2000s was the US telecoms sector, where Bernard Ebbers built WorldCom on the back of an escalating accounting fraud that ultimately landed him in jail and the company in bankruptcy.

In the process, he forced competitors to distort their own strategies in an attempt to match his and WorldCom’s fabricated fame and fortune.

The same temptation affects Uber’s rivals. “Every other player in this space had to be equally aggressive, so it was like a confederacy of bad behaviour,” one venture capitalist told me last week.

As a result, he added, if a competitor says: “‘We’re going to be nice guys and do the right thing’, it’s very hard to win”.

This should work both ways, so the critical question is: Can Uber turn its culture around and lead disciples back along the path to self-improvement?

Culture change has taken on mystical importance since the financial crisis.

Part of the reason is that it is widely held that it is as hard to repair culture as it is to define it. Yet consultant Alexander Osterwalder says too often people just “let culture happen”, leading to Uber-sized problems.

It is possible to plot a healthy culture. In fact, the reforms at Uber, even the cosmetic ones (such as renaming its “War Room” a “Peace Room”), are a road map: Set clear standards, measure compliance, reward those who live up to the new rules, get rid of those who do not.

For all the perils of unquestioning imitation, if people at the top model good behaviour, others will learn from it.

From this point of view, Uber’s immediate future does not look hopeful. Mr Kalanick set the tone.

For now, there is nobody who can replace him.

In fact, Uber is an organisation without a chief executive, chief financial officer, chief marketing officer, or chief operating officer — the ultimate self-driving company, as several people quipped last week.

But there is still a chance that Uber could take a different route, perhaps with a different driver. If the company changes course, it is big enough to exert a positive influence over the organisations, in Silicon Valley and beyond, that took their lead from Mr Kalanick.

If it does not, he and his colleagues will go down in corporate history as the people who drove Uber and its convoy of followers into a leadership dead end. FINANCIAL TIMES

ABOUT THE AUTHOR:

Andrew Hill is an associate editor and the management editor of the Financial Times.